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Running Head: SUPPLY CHAIN MANAGEMENT1 Supplier Integration in Skid-Steer Loader Design Name Institution
SUPPLY CHAIN MANAGEMENT2 Introduction As the new supplying manager, Scott Nolan is required to draft a proposal that prescribes how Deere will manage early supplier integration and make Deere skid-steer loader. The process of integrating suppliers should vest on guidelines that can improve the new Deere Skid-steer loader. This paper dissects supplier selection process that Deere should undertake and the techniques for selecting the suppliers. The paper also analyses the challenges of the process and ways of surmounting them. The subsequent section encompasses the benefits of supplier chain integration and supplier evaluation and selection form. Part I: Steps, Tools, and Techniques The first step is defining business need. According to Bozarth and Handfield (2015), defining business is the most challenging step in supply chain selection. During this stage, it is paramount that the company conceptualizes the overall picture of what is going to be done by analysing the current situation and the problem that needs to be addressed. The company should also consider the amount of resources that the company is willing to spend, in terms of finances, technology, and the personnel. In this context, the business need is to develop skid- steer holder to improve services at the Deer Company. The second step is determining specifications. This involves assessing what the company is expecting to obtain at the end of the deal. The selection decision will be premised on the identified specifications. At this stage, suppliers negotiate the maximum or minimum requirements (Chopra, 2016). Deer Company will have to present the information in comprehensive, clear, realistic, and in official format. The next step is agreement on the measurement criteria. Some of the applicable criteria in selection process include size, production capabilities, logistics fit, flexibility,
SUPPLY CHAIN MANAGEMENT3 reliability, and quality management (Daniel, 2018). In the modern context, most companies, like Deer, prefer building partnerships in order to improve their operations efficiency. The fourth step is identification of buying alternatives. To identify buying alternatives, the company must conduct adequate background research to obtain sufficient information about the suppliers. Deere Company will have to review its sourcing strategy before making selection decision. Some of the issues to consider during identification of alternatives include transportation and exchange rate. The next step is supplier selection. This is a critical part of the procurement strategy. The first task is to invite and inform all the new suppliers in Holland concerning the Deere’s intention to design and develop its own skid-steer loader. A request is then sent to the listed companies to quote their price. Besides quoted price, Scot Nolan will have to consider record of accomplishment of the listed companies in terms of their performance in service and delivery (Heizer et al., 2017). Companies with long experience in supplying skid steer are given first priority during the selection. Deere will then invited suitable supplier that it intends to collaborate with, based on their experience and market positioning in supplying skid steer as well as its spare parts. A supplier that has the capability to manufacture a variety of the machinery parts should be considered as a joint partner in production or delivery. One of the advantages of sourcing worldwide is that it provides springboard for Deere skid-steere loader to be distributed at wider location with minimum supply chain overheads. Bearing that Deere is a multinational company that has markets in over 160 countries, the company can maximize its capability in local sourcing within these countries during finishing stage of some parts. Sourcing some parts locally enables the company to minimize delivery time and maintain efficiency. The evaluation of the suppliers should take into consideration industry certifications, ISO, and quality. Since Deere is a multinational company, international standards— in terms
SUPPLY CHAIN MANAGEMENT4 of product quality, price, and delivery concerns— should be considered during the selection. In addition, Deere will have to ascertain the supplier’s capability to supply adequately as ordered by the company. According to Jacobs and Chase (2018), organizations should critically assess capital security and production capacity of the supplier before making selection decision. This is because the supplier will collaborate with Deere during a long period and therefore it must be willing and have the capacity to adhere to certain payment conditions. Another approach of selecting the supplier is examining the interest of the suppliers to be part of design and manufacturing collaboration— through assessment of their research and development capability (Swink, 2011). The evaluation should be underpinned on the level of partnership the supplier is willing to have. This is because Deere expects— not just supplying but— warranties, technical support, and technical service from the supplier in order to improve product quality. Moreover, Deere will have to gauge and compare the cost of dealing with the listed suppliers. After comparing the payment amount, the supplier with company that has the best offer is picked. Although Deere is looking for low cost, the latter is not the major determinant of selection since high quality is also a concern. Similarly, Deere could select suppliers from companies that undertake similar programs by optimizing supplier integration models to ameliorate its supplier management strategy. Selection Techniques Prequalification techniques in selection process Pre-qualification process helps the company to narrow down the set of suppliers to suitable ones. One of the prequalification technique isCluster Analysis, which is derived from statistics(Agarwal and Rathore, 2016). This method applies sorting algorithms for clustering the number of items that are defined by set of scores as obtained from the clusters.
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